Question

The definition of fair market value for valuation purposes includes which of the following terms:

a) Acting at arm's length
b) Closed and restricted market
c) Lowest price available
d) Under a compulsion to act

Answer 1

Market forces can incentivize a business to act in a less discriminatory fashion as they respond to consumer demand and seek to maximize profits.

Step-by-step explanation:

When market forces are at play, businesses may have an incentive to act in a less discriminatory fashion in order to meet consumer demand and maximize profits. Here are explanations for each situation:

1. A local flower delivery business run by a bigoted white owner may be motivated to serve its black customers to increase sales and expand its customer base.
2. An assembly line that traditionally hired only men but is struggling to find qualified workers might be compelled to open up opportunities to women in order to attract more applicants and ensure a sufficient labor supply.
3. A biased owner of a firm providing home health care services may realize that paying lower wages to Hispanic workers could result in a decline in quality and reputation, potentially leading to a loss of customers. Hence, they might choose to pay competitive wages to all employees to maintain a high standard of care and retain clients.